Louis James, long time Doug Casey’s International Speculator team member, interviews Prophecy’s Chairman John Lee, about Prophecy’s flagship Gilbellini Vanadium Project, its progress, vanadium price and plans ahead. It has gathered tens of thousands views and a can’t miss.

Vanadium pentoxide price reached all time high of $31.5/lb (www.vanadiumprice.com) from 2016 low of $2.5/lb due to Chinese upgrade of vanadium intensity in steel re-enforcement bars in the construction industry, as well as increasing vanadium usage in the aerospace industry and large scale vanadium batteries in the utility industry.

China: US$33.90/lb (+0.00%)
Jan 21, 2019

Located in Nevada, premium location for mining- Ranked #1 for North America mining investment (Fraser Institute)

Vanadium price has increased by more than 900% since 2016 – from US$3/lb to US$31.5/lb on the back of strong demand and restricted supply

Low Capex, Low Opex, High IRR

Near Term Production – complete permitting in 2020, commence construction in 2021, start vanadium production in 2022

Vanadium is key to worlds energy future!

Highlights of the interview:

“What we see is the perfect storm in terms of restricted supply and steady demand for vanadium from all sectors: from rebar to aerospace to batteries – I would not be surprised if vanadium price goes to US$50/lb or even US$100/lb”

“Key drivers of demand for vanadium is: upgrade of high strength rebar standards in China which will result in doubling of vanadium addition to steel and increase vanadium consumption by 30%, application of vanadium in aerospace industry, and batteries industry where vanadium batteries are ideally suited for the solar and wind power which constitutes over 700 GW of generation capacity”

“If you look at the supply side – there is not another greenfield vanadium mine coming into production for another 5 years!”

“There is one thing we really love, really passionate about operating in Nevada - it is the best place for mining investment in all North America, where all stakeholders respect the rule of law and share the common objective of bringing the Gibellini Vanadium Project to production – this is one of the beauties of operating in the US!”

“An updated, 2018 PEA pegged the after-tax NPV at US$338.3 million and the IRR at 50.8%. Gibellini contains 129.28 million pounds of vanadium pentoxide (V205) grading 0.294%. The current mine plan envisions producing 9.65 million pounds annually for over 13 years, paying back its capital cost of US$116.8 million in 1.72 years. The after tax net present value of the Gibellini vanadium project is north of US$338 million, meaning Prophecy is trading at a significant discount to its project value.

That was all done at a vanadium price of $12.73 per pound. Vanadium prices are currently twice that.

Two weeks after my March trip, Prophecy put out a news release that Northwest Nonferrous had entered into a technical advisory and cooperation agreement to advance the Gibellini project. And they may become an equity holder.

Couple this with the fervor in vanadium that is expected to continue, including China becoming a net importer, and the sector is ripe for increased valuations from which I believe Prophecy will benefit.

Plus it has the additional benefits of an experienced Chinese partner, an oxidized black shale ore that doesn’t need roasting, and a streamlined permitting process with the tailwind of a newly-supportive government.

Shares have been as high at C$0.50 in the past year but now trade at ~C$0.285.

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

Forward-looking statements in this news release relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the PEA representing a viable development option for the project; (ii) construction of a mine at the project and related actions; (iii) estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods; (iv) the estimated amount of future production, both produced and metal recovered; and (vi) life of mine estimates and estimates of operating costs and total costs, cash flow, net present value and economic returns including internal rate of return estimates from an operating mine constructed at the project. All forward-looking statements are based on Prophecy’s or its consultants’ current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include: (i) the presence of and continuity of vanadium mineralization at the project at estimated grades; (ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results; (iii) infrastrucature construction costs and schedule; (iv) the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times; (v) currency exchange rates; (vi) vanadium sale prices; (vii) appropriate discount rates applied to the cash flows in the economic analysis; (viii) tax rates applicable to the proposed mining operation; (ix) the availability of acceptable financing on reasonable terms; (x) projected recovery rates and use of a process method, that although well-known and proven on other commodity types like copper, has not been previously brought into production for a vanadium project; (xi) reasonable contingency requirements; (xii) success in realizing proposed operations; and (xiii) assumptions that project environmental approval and permitting will be forthcoming from county, state and federal authorities. The economic analysis is partly based on Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these Mineral Resources will be realized. Currently there are no Mineral Reserves on the Gibellini property. Although the Company’s management and its consultants consider these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

These factors should be considered carefully, and readers should not place undue reliance on Prophecy’s or its consultant’s forward-looking statements. Prophecy or its consultants believe that the expectations reflected in the forward-looking statements contained in this news release and the documents incorporated by reference herein are reasonable, but no assurance can be given that these expectations will prove to be correct. In addition, although Prophecy and its consultants have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Prophecy or its consultants undertake no obligation to release publicly any future revisions to forward-looking statements to reflect events or circumstances after the date of this news or to reflect the occurrence of unanticipated events, except as expressly required by law.